Rep. John Garamendi was on the phone with reporters just now to tout President Obama’s American Jobs Act, which he called “an extremely important, and very good and timely, proposal.”

Garamendi, D-Walnut Grove, said he’s increasingly excited about “the potential this has to employ people, get them back to work and get the economy moving again” and about the fact that that this “a major jobs program that is totally paid for.”

He said he was talking earlier today with Columbia University economist Joseph Stiglitz about the concept of growing the economy by putting people to work and simultaneously raising taxes where appropriate. The President’s plan, he said, has significant tax reductions in places likeliest to boost employment and the economy as well as tax increases where they have best chance to raise money from those who can afford it with least impact on consumer demand.

Specifically, the plan calls for $400 billion in new tax revenue by limiting itemized deductions and certain other exemptions for individuals with adjusted gross incomes of $200,000 or more, or $250,000 and up for married couples. Another $40 billion would come from closing tax loopholes for the enormously profitable oil and gas sector; $18 billion would come from ending hedge fund managers’ ability to count their earnings at the capital gains rate rather than as earned income; and $3 billion on reforming the corporate jet depreciation schedule.

And what would it pay for, particularly here in California? Details, after the jump…

According to the White House, the American Jobs Act will cut the payroll tax in half to 3.1 percent for employers on the first $5 million in wages, providing broad tax relief to all businesses but targeting it to the 98 percent of firms with wages below this level; in California, 710,000 firms would receive a payroll tax cut. The President’s plan also will expand the payroll tax cut passed last December by cutting workers payroll taxes in half next year; a typical California household, with a median income of around $56,000, would receive a tax cut of around $1,740.

The President’s plan also includes $50 billion in immediate investments for highways, transit, rail and aviation, helping to modernize an infrastructure that now receives a grade of “D” from the American Society of Civil Engineers and putting hundreds of thousands of construction workers back on the job, the White House says. This would include $3.96 billion in investments in California, which could support at least about 51,500 local jobs.

President Obama proposes to invest $35 billion to prevent layoffs of up to 280,000 teachers nationwide, while supporting the hiring of tens of thousands more and keeping cops and firefighters on the job; California would get about $3.62 billion to support up to 37,300 educator and first-responder jobs.

The White House says the plan includes a $25 billion investment in school infrastructure that will modernize at least 35,000 public schools nationwide; in California, it would mean an estimated $2.81 billion to support up to 36,600 jobs. Also, the plan includes investing $15 billion nationwide to employ construction workers in rehabilitating and refurbishing hundreds of thousands of vacant and foreclosed homes and businesses; California could get about $1.85 billion of that, plus funds available by competitive application. And the President proposes $5 billion of investments for facilities modernization needs at community colleges, including up to $1.13 billion for California.

The American Jobs Act also includes reforming the unemployment insurance system to help the jobless transition back to work, including more than a million long-term unemployed Californians, the White House says. The President also wants to extend unemployment insurance, keeping almost 357,000 Californians from losing their benefits in just the first six weeks. And the President proposes a new “Pathways Back to Work Fund” to give hundreds of thousands of low-income youth and adults – including an estimated 19,800 adults and 58,600 youths in California – chances to work and to get training in growth industries.

Republicans including those on the 12-member, bipartisan Joint Committee on Deficit Reduction don’t seem inclined to support such measures right now, Garamendi acknowledged today, but “the point of the next few months is to convince them that the American public wants to get back to work… That is a policy campaign the President will be conducting.”

Extending the “temporary” payroll tax cut on the worker share and doubling down by cutting the employer share in half strikes me as an incredibly stupid move. Why? A. Many economists have expressed doubts that this will stimulate economic growth, compared with more spending stimulus on infrastructure. B. As we’ve learned, the longer a “temporary” tax break remains in effect, the harder and more damaging it is to restore it to normal. C. It plays right into the hands of those who call Social Security a “Ponzi scheme” and “inter-generational theft.” Supposedly, this doesn’t affect Social Security finances, because the plan is to make the SS accounts whole by transferring money from the general fund (the debt-financed general fund) to SS. Problem is, that turns SS from a program that is entirely financed from its own dedicated source of revenue and, therefore, does not add a penny to the nation’s long-term indebtedness, into just another government spending program paid for with money borrowed from China. Grover Norquist and the GOP should love this as a bold move on behalf of their “starve the beast” strategy.

Elwood

@John W

Agreed, but the O’bummer plan doesn’t really “starve the beast”. It just creates another government financed entitlement program (of which the dimmiecrats are so fond).

As for Garamendi, he would endorse the murder of six-year-olds if O’bummer and Nancy did.

lars54

I really like the proposals to end special tax breaks for this growing cohort of billionaires, hedge fund managers, CEO’s, Oil Company executives and so forth – those guys that think paying taxes is for the little people. Ending these giveaway to the rich and well heeled will be funding most of this 500 billion, as I understand it. We need to target the private jet crowd, the people that have 16 homes, and 22 cars. As a blue collar worker I’ve growing weary of subsidizing these people, let’s make them pay their fair share of taxes like everybody else.

John W

Frankly, I think the Republicans have a reasonable point when they argue against permanent tax increases to fund a basket of various temporary tax breaks. Don’t get me wrong. I’m for either going back to the Clinton rates for everybody (including the middle class) or phasing out all tax expenditures (deductions, exemptions etc.) in exchange for eventually recalibrating tax rates downward (once we get a grip on our fiscal imbalance). I think Obama should have kept it simple by making his entire proposal about hard core infrastructure projects (no Solyndras or economically unfeasible high speed rail), with no “pay fors” and no tax gimmicks. Whatever the size of the package, I would have allocated it among the states based on each state’s share of unemployed.

Rick K.

Garamendi is a Democratic party stooge who knows nothing about job creation and the private sector. He was head of California’s Economic Development Commission as Lt. Gov. but even current Democratic Lt. Gov. Gavin Newsom has criticized Garamendi for failing to create any real economic development plan during his three years in that office. Garamendi supposedly worked in the private sector in the late ’90s but it was a do-nothing, well-paid position created by Democratic multi-millionaire Ron Burkle. Garamendi basically got paid handsomely for doing little or no work until he figured out the next step of his political career. And while thousands of his own constituents are unemployed, Garamendi boasts in speeches that he is so glad that he left the Lt. Gov. job and ran for Congress (in a district where he doesn’t live) because congressman is “the best job” he’s ever had. How smug and out-of-touch with reality. Plus he’s a chameleon. He hated nuclear power back in the early ’80s when he ran for governor, then wholeheartedly has embraced the nuclear power industry in Congress (even as he criticized the oil industry for the Deep Horizon oil spill, as if nuclear power was the safest thing ever). Only the 2011 nuclear disaster in Japan has halted his pro-nuke love fest. I doubt that the people of Garamendi’s new district will tolerate this tired, disproven career politician. A moderate Republican (maybe Colusa County Supervisor Vann) can take him out in 2012. Good riddance.

Publius

I agree with Elwood this bill is DOA. After the complete failure of Stimulus I, how can they expect the American people to buy into Stimulus II. When our local lefties “tout” the plan they are mere actors on a political stage playing a role, appeasing their base, all the while knowing in their bleeding hearts, that this bill does not have a chance of passing. What a waste of time!

Garamendi is very responsive to voters concerns AND the concerns of pundits, more so than any other Bay Area legislator has been on a long time. You are going to wish he was still in the 10TH CD when they go to their new districts. As for tax cuts, Chevron’s guy on economics, Chris Thornberg, says a tax cut will increase consumer spending but people r just going to buy things like cameras which r made in China so we would be better off investing in ifrastructure.

RR, Senile Columnist

You’re right, Jean. With improved roads it will be easier to reach the welfare office.